The loss of foreign tourist demand has been the main cause of the significant decline in car rental in 2020 and 2021. Despite the rising number of domestic transactions, car rental in Hong Kong is still highly dependent on tourist demand.
Car rental in Hong Kong is led by Avis and Dah Chong Hong, with both brands remaining active through online and offline channels throughout 2020 and into 2021. During the COVID-19 pandemic, leading player Dah Chong Hong has explored new ways to utilise its fleet capacity such as renting out vehicles for a few hours as wedding cars and encouraging domestic travel through weekend car rental packages.
Car rental is expected to rebound once Hong Kong’s borders reopen and the government permits entry for non-residents; however, the number of transactions is unlikely to return to pre-COVID-19 levels by the end of the forecast period. The demand for car rental is highly influenced by the standard of Hong Kong’s public transportation infrastructure.
From a destination point of view, Hong Kong’s car rental market is relatively small accounting for a tiny fraction of overall spending on transport. With the leading car rental players providing similar offerings, price is one of the most important criteria tourists look for when renting a car in Hong Kong.
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Car rental covers the short-term rental of passenger vehicles for self-drive including small vans by both business and leisure users, whether from the airport or downtown locations. Small vans up to one tonne are included. For longer than average rental periods, eg rental of one month, provided the rental is sourced from the short-term rental fleet, this transaction is included. Car rental value covers the price of car hire to the consumer. Ancillary revenues are included, such as the hire of baby car seats, GPS navigation systems, optional roadside assistance services and collision and damage waivers. Volume is provided by the number of car hire transactions, fleet size and number of car rental operators. In underdeveloped markets, car rental companies offer chauffeur-driven cars. Most people prefer these options, due to unfamiliarity with the roads. Euromonitor International includes chauffeur-driven cars in car rental, when they concern car rental companies such as Hertz or Avis, which offer a chauffeur-driven service as an additional option. Car rental covers sales to inbound tourists and domestic tourists. i.e. from a destination point of view (also known as point of supply). For example, if a US citizen books a car rental service in France via the US offices of Hertz, the sales are attributed to Hertz France. The same applies for online sales. Car rental excludes long-term leasing, commercial vehicles, trucks and motorbikes and local car sharing schemes.See All of Our Definitions
This report originates from Passport, our Car Rental research and analysis database.
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